The two most important types of conversation you’ll have when founding a business are those with potential customers and those with potential investors. The Mom Test (2013) offers advice on nailing the information you really need from these meetings, and ensuring your business has the best possible foundation for success.
About the author:
Rob Fitzpatrick is a tech entrepreneur and partner at Founder Centric, where he helps universities, businesses, and EU-funded start-ups design and deliver better start-up education programs.
Before you rush into your new business idea, you must have got feedback from your friends and family:
Your friends and family will most likely fail to give you honest and real feedback because they might feel that their responsibility is to support and encourage you no matter what. Similarly, the investor may pretend to like your idea so that you would quit talking about it. At this point, you have to be sure that your business idea is good and profitable even though you are surrounded by people that can’t be truthful to you.
It’s always hard to get an honest opinion about your business from close ones, especially if you don’t ask the right questions.
Be aware always to ask the right questions for you to gather useful details that can help you in your new business and your target market:
For you to find success and be an extraordinary entrepreneur, you must have skills in asking questions, especially the ones that can point you in all the right directions. By doing so, you are expanding and evolving your business idea.
Asking will be a great guide to teach you both the advantages and disadvantages of the idea you have. You can mention strategic questions like the potential problems that your customers may face and the solutions they are trying to find.
But always remember not to try to sell anything in the market if the customers aren’t willing to pay; it’s a profitable business in the end, and so it should be.
“Some problems don’t actually matter.”
Always make sure to get a commitment from investor and don’t let compliments fool you:
While pitching your idea for a possible investor or sponsor, be sure to try and pick up their body language and verbalism to be certain of their interest in lack of in some cases.
Once investor feels bored with your presentation, they tend to start complimenting your to get rid of you. This is a red flag that means the meeting has gone the wrong way. When you are in such a situation, now it’s your cue to deflect the compliments, re-strategize your questions, and get to the point where the facts and ideas of the business are.
Try your best to find opportunities where you can have casual and moderate meetings with potential investors and customers:
Almost always, you have to go through an awkward meeting that usually lasts hours and might not be productive. When you are pitching ideas to investors, you can follow very effective strategies that will make your meeting a great success.
Try and make the chat less intense and loosen up a bit. Make your conversation partner relaxed in a cool environment so they would be open about their opinions and feelings.
Also, make sure to stay within minimal formalities and a respecting domain. You can lead by asking about their day, their problems towards the product, as well as their ideas for solving them. This will provoke an honest conversation, and they will feel that you are genuinely interested in whatever they say.
Keep your focus on a small-scale group of costumers; learn what they want and how you can meet their needs:
As a new business owner, you guys are usually full of great ideas and many options – you don’t have to cover all these great ideas of yours at once. Doing so slows you down and distracts you. That’s why you should focus on a small group of customers and give them the best quality information and products you can.
For example, you may tackle a specific group, like employed men from ages 18 to 25 who will be preparing for a marathon next year. Men in this specific category would be looking for specialized training, specific activities, and a healthy diet plan. At this point, it’s your turn to come in and sell your app or product that will help them prepare well for this marathon.
As an investor, you should always be the one to implement what your target group would want.
“It boils down to this: you aren’t allowed to tell them what their problem is, and in return, they aren’t allowed to tell you what to build. They own the problem; you own the solution.”
Push for advancement and commitment when pitching your business ideas so that you would know that you are on the right track:
When investors seem honest with you, they usually open up – the more they do, the more you can trust their opinion and judgment.
If you finish any meeting with no idea what will happen next, the meeting was for sure in vain.
You will have to go off to a resolution. If you don’t, the meeting will start to drift away and leads nowhere.
When you don’t succeed in pushing for advancement, you will end up with nothing, potential investors and customers will keep playing you but never end up writing you a check. This is the consequence of being clingy and being fearful of rejection. By giving them a choice to either commit or reject you, you can say goodbye for unproductivity and celebrate real leads.
Keep the relationship between you and clients or investors interesting and uncomplicated; always get straight to the point:
In terms of mindset, don’t go up to customers beating around unproductive points, you’ll only look needy and desperate, and you will lose the position of power.
Instead, look for industry and customer advisors. You are trying to find well-informed people who can understand your ideas. If it’s a topic both of you are interested in, find a way to talk about it. Your idea never needs to be put out there, and both of you will enjoy the conversation.
Now that you are aware of your business idea is good or not, and if people around you are lying to you, you need to proceed accordingly. With the set of rules, you just learned from this book. You have enough information on how to kick start your business and be able to identify any problem and fix it.
Before getting into a meeting, list out the essential questions you have for the investor or customer in advance. This will guarantee that you get hold of all the information you need.